Fair Use Set For Shakeup As “Purple Rain” UMG Trial Moves Forward

What constitutes "fair use" of music seems about to be redefined as a panel of ederal judged allows the appeal of the 2007 case of a toddler dancing to Prince's Purple Rain vs. Universal Music to move forward. "Fair use is not just excused by the law, it is wholly authorized by the law," the court said in its ruling.

A federal appeals court has dealt a blow to Universal Records when it ruled that a lawsuit brought against the label over a Youtube video could proceed to trial.

The 29 second video, posted by Pennsylvania mom Stephanie Lenz in 2007, depicted her son Holden, then a toddler, dancing to Prince's Purple Rain. Universal Music claimed that Lenz's video constituted copyright infringement and ordered YouTube to take the video down, which it did temporarily.

However, Lenz maintains that Universal did not consider her rights to fair use of the music when they requested the takedown and the nonprofit Electronic Frontier Foundation sued Universal on her behalf.

On Monday, a Federal appeals court sided with Lenz and the EFF, upholding her lawsuit and allowing the case to proceed to trial. The court ruled that Lenz could seek nominal damages as the video was non-commercial and was temporarily taken down.

"Fair use is not just excused by the law, it is wholly authorized by the law," the appeals court said in its ruling.

In a statement to ABC News, Universal said, "We respectfully disagree with the court's conclusion about the [Digital Millennium Copyright Act] and the burden the court places upon copyright holders before sending takedown notices." – via Celebrity Access

Universal Music Group should have considered whether a woman's use of a Prince song in a YouTube video constituted fair use before it sent her a takedown notification, the Ninth Circuit ruled Monday.

Stephanie Lenz sued Universal in 2007 after it took down a 29-second video of her two young children dancing to the R&B artist's song "Let's Go Crazy. She alleged violation of the Digital Millennium Copyright Act. At the time Lenz posted the video, the panel's opinion says, Universal was Prince's publishing administrator responsible for enforcing his copyrights.

A federal judge found that Universal failed to consider fair use before it sent the takedown notification — raising a triable issue as to whether Universal formed a "subjective good faith belief" that the song's use was illegal — and after a hearing in July the Circuit upheld the court's decision.

In the three-judge panel's 34-page opinion, U.S. Circuit Judge Richard Tallman said that Lenz's claim "boils down to a question of whether copyright holders have been abusing the extrajudicial takedown procedures provided for the DMCA by declining to first evaluate whether the content qualifies as fair use."

Universal's "sole textual argument," Tallman said, is that "fair use is not 'authorized by law' because it is an affirmative defense that excuses otherwise infringing conduct." "Even if, as Universal urges, fair use is classified as an 'affirmative defense,' we hold — for the purposes of the DMCA — fair use is uniquely situated in copyright law as to be treated differently than traditional affirmative defenses," he said.

Tallman said that Universal faces liability if it knowingly misrepresented in the takedown notification that it had formed a good faith belief the video was not legally authorized, and he said Lenz indeed presented evidence that Universal did not form "any subjective belief about the video's fair use — one way or another — because it failed to consider fair use at all, and knew that it failed to do so."

A copyright holder who pays "lip service" to fair use consideration, he said, is still subject to that liability. "Copyright holders cannot shirk their duty to consider — in good faith and prior to sending a takedown notification — whether allegedly infringing material constitutes fair use," Tallman said.

Writing separately from the majority, U.S. Circuit Judge Milan Smith partially dissented, finding that "the relevant representation in this case is Universal's assertion that the video is infringing."

"Universal knew that a fair use was not infringing, knew that it had not considered fair use, and nonetheless asserted that the video was infringing," Smith said. "In sum, I would hold that parties must individually consider whether a work is a fair use before representing that the work is infringing in a takedown notice."

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